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RMBS

Residential mortgage-backed securities, or RMBS, are bonds or notes created by securitisation that are backed by residential mortgages or residential real estate loans. RMBS originators are typically financial institutions that originate residential real estate or residential mortgage loans, including banks, building societies/savings & loans and mortgage finance companies. However, issuers could also include government-guaranteed securities issued following bank bailouts, such as TARP or TALF, and the Government Sponsored Enterprises Fannie Mae and Freddie Mac. To create residential mortgage-backed securities, or RMBS, institutions sell pools of their loans to a special-purpose vehicle, or SPV, which then sells the loans to a trust. The trust then repackages the loans as interest-bearing securities and issues them. This true sale of the loans to the SPV ensures that the RMBS is treated as bankruptcy-remote from the originator. Many different types of assets back RMBS, including prime, non-conforming, sub-prime, Alt-A (or Alternative-A), buy-to-let and single-family rental (SFR) mortgages. The financial crisis caused residential mortgage valuations to plummet, leading to severe losses/defaults in many RMBS transactions (and ABS CDOs), as well as efforts to begin modifying loan documentation and indeed the creation of many credit/dislocation/distressed opportunity/recovery funds to take advantage of opportunities in the RMBS sector. Post-crisis, the Government Sponsored Enterprises Fannie Mae and Freddie Mac have developed a credit risk transfer market, comprising synthetic RMBS structures (whereby the risk is transferred via CDS tranches).


  • Morgan Stanley settlement reached

    Morgan Stanley has agreed to pay the FDIC nearly US$63m regarding claims over the sale of RMBS to th...

    Job Swaps    3 February 2016
  • Business development leader added

    ZAIS Group has appointed Gregory Barrett as head of client relations and business development. He re...

    Job Swaps    3 February 2016
  • Euro ABS/MBS stifled

    The European ABS/MBS secondary market continues to be stifled by wider market weakness. Activity w...

    SCIWire    3 February 2016
  • UKAR servicing transfer agreed

    Computershare has been appointed preferred supplier in the tender process to undertake the mortgage...

    Job Swaps    2 February 2016
  • Risks weighed for modified RMBS

    The scheduled increase in interest rates on certain US RMBS-linked modified loans is seen by Moody's...

    News Round-up    2 February 2016
  • Euro secondary still slow

    It continues to be a slow start to the month for the European securitisation secondary market. "It...

    SCIWire    2 February 2016
  • SCI Start the Week - 1 February

    A look at the major activity in structured finance over the past seven days

    Pipeline The pipeline was slightly quieter last week as fewer deals joined and fewer deals left. At...

    News    1 February 2016
  • Catalonia law irks NPL buyers

    A new Catalonian law on housing emergencies could deter potential purchases of Spanish mortgage NPLs...

    News Round-up    1 February 2016
  • MI analysis updated

    Morningstar Credit Ratings has published an updated methodology for US RMBS ratings, including an ex...

    News Round-up    1 February 2016
  • Euro secondary quiet

    Month-end made for a relatively quiet session on Friday for the European securitisation secondary ma...

    SCIWire    1 February 2016
  • Euro secondary sees more of the same

    It was a case of more of the same in the European securitisation secondary market yesterday. Flows...

    SCIWire    29 January 2016
  • Law firm promotes SF pros

    Cadwalader has elected new partners and made promotions to special counsel, with a number of structu...

    Job Swaps    28 January 2016
  • Euro secondary keeps positive

    The European securitisation secondary market is holding on to the positive tone of the past few sess...

    SCIWire    28 January 2016
  • Fresh Freddie NPL sales scheduled

    Freddie Mac is marketing its latest NPL offering, an auction of US$1.6bn in seasoned non-performing...

    News Round-up    27 January 2016
  • South Korean issuance surges

    South Korean securitisation issuance nearly doubled in 2015, rising by 99.8% to Won83trn from Won41....

    News Round-up    27 January 2016
  • JPMorgan settles RMBS dispute

    Ambac Assurance Corporation and its segregated account have settled their RMBS disputes and litigati...

    Job Swaps    27 January 2016
  • Euro secondary on the up

    Activity and pricing levels are on the up in some sectors of the European securitisation secondary m...

    SCIWire    27 January 2016
  • Loan re-classification resolved

    Moody's has affirmed its ratings of all Pepper Residential Securities Trust No. 15 notes, following...

    News Round-up    26 January 2016
  • Countrywide pay-outs calculated

    National Economic Research Associates submitted their allocable share calculations earlier this mont...

    News Round-up    26 January 2016
  • First jumbo RMBS 2.0s called

    The US prime jumbo RMBS sector has seen its first three post-crisis transactions called, none of whi...

    News Round-up    26 January 2016
  • Euro secondary similar

    Patterns in the European securitisation secondary market remain similar despite the continuing volat...

    SCIWire    26 January 2016